Is the STI a good index?

I had previously written a post that 30 stocks is definitely not enough for diversification: here. However, many investors are currently putting money into the Straits Times Index (STI) fund regularly.

As you may know, the STI is a basket of 30 stocks. The STI is actually not passively managed as there are reviews to choose the basket of stocks. In 2015 last year, there were changes to the index. Olam, Jardine Matheson, and Jardine Strategic Holdings paved away for UOL, Yangzijiang, and SATS.

STI is an actively managed index

I could not find out who is the review board that selects the stocks, but the changes made were announced by three parties: SPH, SGX, and FTSE. The changes were prompted by new rules requiring shares on the STI to have a reasonably high level of turnover or liquidity.